Outsourcing in India and How Human Resource Management Can Help Combat Present Challenges - Case Study Example

Human Resource Management Name Course Name and Code Instructor’s Name Date Table of Contents Introduction 3 Outsourcing 4 Outsourcing in India and how human resource management, can help combat present challenges 4 Conclusion 8 Recommendations 9 References 10 Introduction Traditionally, the human resource management practice in an organization was not much valued as other organizational resources such as equipments, material, capital and financial resources. However, in the recent past, more and more business are investing in promoting effective and efficient human resource management schemes. This is because, there is a realization that human resource is the most regular, reliable and valuable resource to an organization (Armstrong, 2006). An organization may have the best-laid goals and objectives, have substantial amount of capital and financial back up but with disjointed human resource, all these will amount to nothing. Human resource management in an organization entails planning, applying, taking control of the selecting, hiring and training of the employees and managing the organization growth efforts. The main purpose of human resource management is to increase productivity by making the employees utilize their best potential and skills optimally, develop the personal and professional lives of the labor force and rewarding and appreciating good performance by complying with applicable labor laws (Lawler, et al., 2009). By so doing, employees feel appreciated, empowered, satisfies, motivated, and thereby, strive to achieve the set organizational goals, objectives, and those of their own. As per the case study on the evolution of outsourcing, human resource management is fundamental in not only selecting and hiring efficient and competent workers, but also in developing them through regular training and encouraging employee participation in decision-making and problem solving processes. This as indicated in the case study has been lacking in call centers in Bangalore India. Despite the availability of skilled, experienced, and knowledgeable workforces, there has been massive staff turnover. This report seeks to in-depth analyze the functions of HRM in making outsourcing practice a success in India. Outsourcing As business and market situations, erratically changes due to industrial, legal, economical, ecological, social, and political factors, more and more profit, and non-profit making businesses are outsourcing business to be able to survive hard fiscal, economic, and uncertain times in the modern world. Outsourcing deals with an organization signing a contract with a third party to deliver business functions (Halvey & Melby, 2007). Business functions outsourced are finance, human resource, communication and customer care service, legal functions, accounting and information technology among others (Brown, & Wilson, 2005). The practice offers a resolution of current business and market challenges in the competitive market environments. Offshore outsourcing refers to when a business company from oversea nation outsource products and services whilst near shore outsourcing is outsourcing services and products in a bordering region (Duening, 2005). Outsourcing helps in reducing costs associated with hiring processes, minimizing and safeguarding against possible threats and it is beneficial for business organizations that seek to establish change and innovation of its products and services (Halvey & Melby, 2007). Outsourcing in India and how human resource management, can help combat present challenges If outsourcing is so beneficial, why is there an increased staff turnover in India? One would ask. Despite the rich availability of learned workforces to employ in call centers, the turnover is, estimated to be 40-100% in India compared to the low 20% turnover in Western economies. According to Thite and Rusell study, inadequate career paths, unchallenging occupation, monotony, inappropriate working hours, and controlling and micro-managing management practices are associated with the high employee turnover. These areas surprisingly fall under the functions of the human resource management. Human resource management is charged with the responsibility of not only selecting, hiring and training employees, but also ensuring the right candidate is assigned the appropriate task and the employee is routinely offered opportunities in his work station that challenge their abilities, intellect, skills, experience, decision making and problem solving capabilities (Lawler, et al., 2009). By so doing, the employee feels the need to do more, learn more, and become more innovative and creative to handle task challenges assigned to them. This innovativeness leads to an increase in the organization’s competitiveness and ensure increased capacity of production of quality services and products hence increased market share and profitability. By keenly recognizing call canter and outsourcing industry trends and future skills and academic requirements, the outsourcing human resource personnel in India will employ practices and structures that will help them know who and when to recruit, promote, what remunerations should be paid, establish training needs and therefore, boost employee’s job satisfaction in the call centers (Vagadia, 2010). This will reduce absenteeism, low morale, and boredom, which have the potential to produce ineffective and inefficient services and hence dissatisfied customers (Brown, & Wilson, 2005). This includes taking note of the changes in the outsourcing industry in the region, such as reluctance for organizations to operate call centers in India and preferring to open shop in areas perceived to be more effective and efficient in terms of retaining employees. Moreover, investing in outsourcing practice by, not only outsourcing low skilled jobs but also, in high skilled jobs. These jobs include Finance, Information and Technology, Multimedia, Law, Accounting, and human resource among others. Human resource management is responsible for organizing, using, and maintaining the labor force. This entails drawing framework for work processes and operations that allow development of communication systems vertically and horizontally across the organization structures (Armstrong, 2006). This allow for consistency, effective employee- management relationships, flow of work processes and adhering to quality, environmental and occupational health and safety standards (Brown, & Wilson, 2005). In India however, employees in outsourced call centers have no participation in key processes due to strict control and micromanagement practices. Moreover, the working hours especially at night are inconsiderate of female workers and employee with families who may need time with their families. The relationship between employee and management is, disjointed making it hard to work cohesively as a team and employees are unable to understand the organization’s goals and objectives and therefore are unable to align their personal goals with those of the organization (Vagadia, 2010). This leads to employees lacking the morale to take ownership of the organization plans. Offering good conditions for working that provides safety and job security goes a long way in motivating workers to work harder and retaining them (Brown, & Wilson, 2005). This seems lacking in India and prevalent in western economies thus explaining the low employee turnover in the latter. The main solution to combating the trend of annually losing competent, skilled, knowledgeable, able, and experienced employees in call centers in India is developing effective strategic human resource management. This includes hiring the best candidate in the field who meets the requirements and qualifications needed for specific job descriptions, offering pre-training sessions to familiarize the new recruit with the running, operations and work processes within the organization and integrating them to the team (Armstrong, 2006). This promotes team-building spirit, cutting costs of annual re-hiring, selecting, and training new recruits and promotes individual accountability. Establishing communication among workers and between workers and the management is beneficial to encouraging creativity, solving complications in the work place and setting goals and objectives that are aligned to those of the workforces. This allows the workers to take ownership in achieving the set goals (Lawler, et al., 2009). Rewarding performance and encouraging more efforts from non-performing workers helps in boosting employee morale in working harder and making use of their potentials in full. Regular training for employees help employees learn new technological solutions, new ways of handling tasks, adding value to their skills and knowledge which helps the organization in not only retaining them, but also in improving capacity of performance and production, improved quality of services, hence increased customer satisfaction and profitability (Armstrong, 2006). It will also involve taking note of the shifting paradigms in the outsourcing industry and identifying what the western economies are doing different to, maximally benefit from outsourcing and minimizing employee turnover. This will entail expanding the scope of outsourcing, by outsourcing not only low-skilled functions but also outsourcing high skilled professions such as accounting and finance (Brown, & Wilson, 2005). This will make use of the high skilled low-cost labor that will help boosts service delivery hence effectively and sufficiently meeting the needs, expectations and changing buying behavior patterns of customers (Duening, 2005). In addition, offering employees flexible working hours with paid overtimes, ensuring job safety and security and meeting environmental, occupation health and safety measures which meets international standards and applicable industrial and labor laws and regulations (Vagadia, 2010). Employing effective human resource management practices in India in the call center outsourcing industry will not be easy. This is because it may entail changing the status quo of the top-level management structures, which is hard especially if the management systems such as strict control and macro-managing employee’s practices, are, integrated within the corporate and business cultures of the organization. Implementation of effective and efficient strategic human resource management practices within outsourcing industry in Bangalore, India, may involve implementing organization changes, which are at times costly to do (Vagadia, 2010). The risk involved may be too high, since offering good remunerations, training, effective lines of communication does not guarantee retaining an employee in case they want to seek greener pastures locally or in oversea nations. Some employees may interpret the changes as leniency, may make inappropriate demands, and may need supervision to perform assigned tasks. Conclusion Due to the need for skilled, knowledgeable, experienced, talented, and competent labor force has necessitated modern organizations to outsource functions such as customer service, finance, accounting, and human resource among others in order to meet rising customer demands for quality, efficiency, and effectiveness. In Bangalore, India, call centers as an outsourced service are booming due to the increased capacity of graduates with English language comprehension and proficiency. However, due to disintegrated human resource management functions such as strict control, inflexible working hours, changing paradigms within outsourcing industry, low employee morale, job monotony, micro-management, and unchallenging career has resulted in job dissatisfaction, absenteeism and hence rapid annual employee turnover. Recommendations To overcome the employee turnover, effective strategic human resource management practices that include proper recruiting, selecting and career development, rewarding performance, communication among organization structures, employee development and regular training, good working conditions and monitoring changing trends within the industry should be developed and implemented. Motivational strategies should be cultivated into organizational operations. Numerous strategies of motivation exist and human resource departments should select the most appropriate strategy to suite the context, and ensure that the organization is successful. References Armstrong, M. 2006. A handbook of human resource management practice. London: Kogan Page Publishers. Brown, D. & Wilson, S. 2005. The black book of outsourcing: how to manage the changes, challenges, and opportunities. New York City: John Wiley and Sons. Duening, T.N. 2005. Essentials of business process outsourcing. Manhattan: John Wiley and Sons. Halvey, J.K., & Melby, B.M. 2007. Business process outsourcing: process, strategies, and contracts. New York: John Wiley and Sons. Lawler, E.A., Boudreau, J.W., & C.E.O. 2009. Achieving excellence in human resources management: an assessment of human resource functions. Stanford: Stanford University Press. Vagadia, B. 2010. Outsourcing to India - A Legal Handbook. London: Springer. Read More